Question
At maturity date, a borrower repays in full the principal of a $1,000 loan and pays $100 interest. Which of the following statements is NOT
At maturity date, a borrower repays in full the principal of a $1,000 loan and pays $100 interest. Which of the following statements is NOT correct?
A. Their assets decrease by $1,100.
B. Their bank deposits decrease by $1,100.
C. Their debt decreases by $1,100.
D. Their equity decreases by $100.
E. Their balance sheet shrinks.
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele
10th edition
9780077515904, 007802529X, 77515900, 978-0078025297
